Capital gets two-star economy rating

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Wellington needs an 'energy injection' as its economy continues to slip, according to the latest ASB regional economic scoreboard.

Wellington dropped slightly to the bottom half of the rankings, rating two stars.

The boost to activity in the capital from the Rugby World Cup was largely confined to a robust increase in retail sales in the past year. Other activity remained relatively weak with jobs, guest nights and commercial construction down.

Wellington also had a relatively weak housing market activity, with flat house prices.

''These developments likely reflect the public sector restraint that has taken place over the past year,'' the ASB report said.

However, consumer confidence in Wellington improved in the March quarter and is now one of the highest in the country.

According to the report, most regions around the country need an energy injection, though a handful are in a ''fair to middling'' state.

Nationally, employment growth slowed early this year, aside from the encouraging recovery in jobs in the Canterbury region.

Wages were picking up, but from ''subdued'' levels, reflecting the gradual lift in employment demand.

Retail sales fell nationally after a surprising drop in supermarket food sales in the March quarter, but there was an underlying trend of gradual recovery in household demand, the report says.

There were also signs of a recovery in construction work, though from extremely weak levels.

Hawke's Bay is facing the toughest times of all the regions in the March quarter, rating just one star in the scoreboard which means- ''take pity'', the report said.

The region had slipped the bottom of the regional rankings, likely reflecting the effects of the high New Zealand dollar on the wine export sector in the region.

The Hawke's Bay household sector was relatively weak, too, with house prices falling in the past year, while prices improved nationally.